CDS programme ‘months behind schedule’

The programme for the new Customs Declaration System (CDS) is running seriously behind time, warn industry software experts.

CDS was due to replace HM Revenue & Customs ageing ‘CHIEF’ system early next year, but testing facilities that should have been made available at the end of July had still not been fully deployed at the time of writing in mid-October, and there is a risk of the programme slipping still further behind.

Marketing director of Nottingham-based Forward Computers, Ken Stewart, said: “Trade Test Milestone 5 (TTM5) was finally deployed almost six weeks late in early September but it didn’t function properly. It was meant to deliver increased scope over TTM4, but there have been all sorts of problems and, frankly, it’s been a debacle”.

HMRC’s original plan was for CDS to be delivered in three releases and be fully ready for imports during November 2018 and exports in January 2019, followed soon after by a wind-down of CHIEF.

Although Release 1 of CDS went live on schedule in mid-August, HMRC has confirmed that only two low-volume traders were currently using it to make “a tiny number” of customs declarations.

HMRC has recently indicated that delivery of full imports functionality will be delayed until “after Christmas”. The publication of the new electronic tariff, which software firms needed to populate their databases, has also been significantly delayed.

Realistically, said Stewart: “I think HMRC could have a working system for imports early in 2019, but there is no way that there will now be enough time to have the whole UK trade move over in February/March.”

He added that at the Association of Freight Software Suppliers (AFSS) autumn meeting, an HMRC spokesperson had stated that CHIEF would have to continue in operation after March. Indeed, the contract to maintain the CHIEF infrastructure had recently been extended to the end of 2020. According to the National Audit Office, HMRC had spent almost £9 million on scaling up CHIEF for contingency.

However, Gordon Tutt of the Association of Freight Software Suppliers told FBJ that dual running of the new and old systems was possible: “The plan was to have non inventory import declarations migrated to CDS and everything else on CHIEF until full migration was possible. It is for this reason that the CHIEF service has been upgraded to handle additional declarations and become part of an overall contingency plan.”

Stewart added that there is also an issue around visibility of common problems that developers are experiencing, resulting in duplication of effort and a huge waste of time. Queries and fault reports lodged with the CDS team often went unanswered for weeks.

He did though sympathise with HMRC, saying that “CDS is an extremely complex project. While HMRC has some very dedicated and capable staff working on the coalface with CDS, they seem stuck between a rock and a hard place”.

Stewart downplayed suggestions that the CDS problems would lead to ‘meltdown’ or complete paralysis of the UK’s international trade after Brexit, but said that there could be potential for “controlled chaos”. In the worst case scenario, problems with HMRC’s systems, coupled with delays at the country’s borders due to an upsurge in the number of clearances needed, “could lead to significant disruption to the trade” he said.

In response to FBJ’s queries, HMRC said in a statement: “The first phase of the Customs Declaration Service was delivered on time in August 2018 and all remaining functionality will be in place by the end of March 2019.”

(A longer version of this story appears in the current printed edition of FBJ – FBJ 7 2018)